Roche Holding AG (ROG.VX) said it doesn't plan to extend its unsolicited takeover bid worth more than $6.5 billion for Illumina Inc. (ILMN) past Friday's deadline, citing preliminary estimates indicating that the incumbents on the U.S. gene-sequencing company's will be re-elected.
"We do not believe that a price above Roche's offer for Illumina of $51 per share would be in the interest of Roche's shareholders," Roche Chief Executive Severin Schwan said.
Ilumina shares were down 9% at $40 in recent premarket trading. Through Wednesday's close the stock was up 44% this year amid the takeover offer.
A Roche unit had proposed amending Illumina's bylaws to increase the number of directors on its board and offered two individuals to fill the new slots. If all Roche's proposals were adopted and its nominees elected, Roche's nominees would have constituted a majority of Illumina's board.
Three proxy advisory firms had recommended that Illumina's shareholders vote against Roche's slate, and Illumina's board has recommended shareholders reject the proposals.
Roche recently raised its offer for Illumina, but the company has continued to spurn the offer as undervaluing its "extraordinary" growth prospects. Roche has called its bid "full, fair and extremely attractive."
The world's largest maker of cancer drugs had launched the hostile takeover attempt in late January in part of a search for ways to expand its offerings in the burgeoning personalized-medicine market.
-By Tess Stynes and Joan E. Solsman, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com